Continued Decline in Mortgage Rates Offers Hope for Buyers
Mortgage rates have once again decreased, providing a glimmer of hope for potential homebuyers. According to Freddie Mac’s latest Primary Mortgage Market Survey, the average rate for a 30-year fixed mortgage fell to 6.61%, down from last week’s 6.67%. Although still higher than last year’s 6.42%, this downward trend is a positive development.
Pending Home Sales Remain Stagnant
Despite the decline in mortgage rates, pending home sales have failed to gain momentum. The National Association of Realtors’ latest index of pending home sales showed no change, staying at a record low in November. This indicates that the recent drop in rates has not been enough to stimulate the housing market.
Housing Starts Show Signs of Progress
In contrast to the stagnant pending home sales, the Commerce Department reported a significant surge in housing starts of 14.8% last month. This suggests some progress in an otherwise sluggish market. Experts note that buyers have shown a preference for new construction due to limited existing home supply and builders’ willingness to offer incentives.
Mortgage Rates Crucial for Affordability and Market Activity
Chief economist Danielle Hale of Realtor.com emphasizes the importance of mortgage rates for both affordability and overall activity in the housing market. While high home prices are expected to persist, maintaining the recent improvement in mortgage rates could lead to better-than-expected home sales activity. The rate decrease has outpaced initial forecasts, providing a positive outlook for the future.
With the housing market eagerly awaiting further developments, the state of mortgage rates will play a vital role in determining the market’s trajectory moving forward.
FOX Business’ Charles Brady contributed to this report.